Pakistan’s planned exemption from sales tax on electric cars is rejected by the IMF
Islamabad: According to The Express Tribune, Pakistan’s proposed sales tax exemption for electric vehicles (EVs) was denied by the International Monetary Fund (IMF), which emphasized that the tax rates should be consistent with customary practices.
According to sources cited by The Express Tribune, the IMF has objected to tax breaks under Pakistan’s EV policy, particularly the exemption on the domestic sale of electric car components.
The tax break was suggested by Pakistan’s Ministry of Industries and Production as a way to encourage the use of EVs. According to the newspaper, the international lender, however, disagreed with the ruling and emphasized that the sales tax on EV raw materials should not be eliminated.
At now, the third round of climate finance talks between Pakistan and the IMF is underway. The two sides will also discuss tariff changes and electric car charging stations. The Pakistani government will inform the IMF of the nation’s goal of building 3,000 charging stations by 2030.
The International Monetary Fund (IMF) sent a technical mission to Islamabad on Monday to discuss climate finance and associated policy issues with Pakistani authorities. The IMF delegation wants to discuss climate funding solutions, such as green budgeting and monitoring systems, with officials.
The goal of the talks, which are scheduled to last until February 28, is to evaluate Pakistan’s progress in funding and climate adaptation. According to The Express Tribune, the planned inclusion of a carbon tax in the government budget for the fiscal year 2025-2026 is one of the meeting’s main agenda items.
The IMF will provide suggestions about its structure and implementation. EVs, subsidies, and improving the green budget are all topics of discussion. It is anticipated that officials will provide updates on Pakistan’s ongoing climate actions and future plans. The visit by the IMF group is a component of larger initiatives to ensure sustainable economic changes by bringing Pakistan’s financial policies into line with international climate obligations.
